Invesco first quarter 2014 results · Summary of first quarter 2014 results Assets under management...

Invesco first quarter 2014 results

Martin L. Flanagan

President and Chief Executive Officer

Loren M. Starr

Chief Financial Officer

May 1, 2014

1

This presentation, and comments made in the associated conference call today, may include “forward-looking statements.” Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, AUM, acquisitions and divestitures, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission.

You may obtain these reports from the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.

Forward-looking statements

Discussion topics

First quarter overview

Investment performance and flows

Update on EMEA

Financial Results

Questions Appendix

2

3

Maintained strong, long-term investment performance – 81% of actively managed assets ahead of peers on a 3-year basis

Net long-term inflows of $6.5 billion driven by strong investment performance and broad demand across a diverse range of capabilities

Adjusted operating income1 up 18.5% over same quarter a year ago

Adjusted operating margin1 improved to 40.9% from 38.9% in same quarter a year ago – an increase of 2 percentage points

Quarterly dividend raised to 25 cents, up 11.1% from quarterly dividend paid last year

First quarter overview Strong investment performance contributed to solid operating results

1. Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of adjusted operating income (and by calculation adjusted operating margin), to the most directly comparable U.S. GAAP financial measure. Past performance is not a guarantee of future results.

4

Summary of first quarter 2014 results

Assets under management

March 31,2014 AUM of $787.3 billion versus $778.7 billion at December 31, 2013

Average AUM was $779.6 billion versus $761.7 billion for the fourth quarter

Flows

Overall operating results*

Capital management

Total net outflows of $0.9 billion Long-term net inflows of $6.5 billion

Adjusted operating income was $363 million versus $347 million in the fourth quarter

Adjusted operating margin was 40.9% in the quarter versus 40.5% in the fourth quarter

Adjusted diluted EPS for the quarter was $0.60 versus $0.58 in the prior quarter

Quarterly dividend of 25 cents per share, an increase of 11% versus the prior year

Repurchased $119.6 million in common stock (3.6 million shares)

* Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial measure.

Discussion topics



Update on EMEA

Financial results

Questions Appendix

5

1-Year 3-Year

Assets top half of peer group

Assets bottom half of peer group

5-Year

Percent of actively managed assets in top half of peer group*

Investment performance – overview Aggregate performance analysis – asset weighted

73%

27%

81%

19%

68%

32%

6

*Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with

component funds managed by Invesco, stable value building block funds and CDOs. Certain funds and products were excluded from the analysis because

of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision.

Data as of 3/31/2014. Includes AUM of $471.5 billion (60% of total IVZ) for 1 year, $469.5 billion (60% of total IVZ) for three year, and $445.1 billion

(57% of total IVZ) for 5 year. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar,

IMA, Russell, Mercer, eVestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional

products and prior month-end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS

composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative

of future results and may not reflect an investor’s experience.

7

Quarterly long-term flows Continued strong gross sales across our global business

Total Active Passive

Quarterly long-term flows ($ billions)

Gross sales

Gross redemptions

Net long-term flows

29.4 34.0 34.4

47.6 44.4

41.8 45.8

50.2

-32.4

-25.5

-31.7 -33.3

-43.0

-36.8

-44.8 -43.7

-3.0

8.5

2.7

14.3

1.4 5.0

1.0

6.5

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

23.8 25.2 27.7

34.1 32.6 33.1

37.2

41.6

-27.1

-21.9 -26.5

-26.2

-32.5 -28.3

-36.9 -38.4

-3.3

3.3 1.2

7.9

0.1

4.8 0.3

3.2

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

5.6

8.8

6.7

13.5

11.8

8.7 8.6 8.6

-5.3

-3.6

-5.2

-7.1

-10.5

-8.5 -7.9

-5.3

0.3

5.2

1.5

6.4

1.3

0.2 0.7

3.3

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

Gross sales

Gross redemptions

Net long-term flows

8

(a) Retail quarterly flows include retail products in the U.S., Canada, U.K., Continental Europe, Asia and our offshore product line. (b) Institutional quarterly flows include our institutional business in the U.S., U.K., Continental Europe and Asia and excludes institutional money

market.

Retail(a) Institutional(b)

Quarterly long-term flows ($ billions)

Quarterly long-term flows Continued strong gross sales in the retail channel

24.3 26.0 26.9

36.2 37.7 35.5 35.8 39.6

-24.6

-20.3

-24.8 -25.9

-32.8

-29.0

-36.1

-32.0

-0.3

5.7

2.1

10.3

4.9 6.5

-0.3

7.6

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

5.1

8.0 7.5

11.4

6.7 6.3

10.0 10.6

-7.8

-5.2 -6.9

-7.4

-10.2

-7.8 -8.7

-11.7

-2.7

2.8

0.6

4.0

-3.5

-1.5

1.3

-1.1

2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

24% 25%

20%

26% 25%

32%

29% 27% 27%

33% 32%

28%

31% 30%

34% 33%

31% 31%

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

16.4 14.6

17.1 16.1

22.0 21.8 21.6

18.4 19.2

3.5 0.7

5.9

0.6

6.8

1.1 2.9

(0.7)

2.9

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

(15%) 4%

US Retail gross sales remained strong $19.2 billion for the quarter – up 4% versus the prior quarter

Source: Data underlying the industry redemption rates are sourced from the ICI and calculated by Invesco. Invesco US Retail excludes PowerShares QQQ and money market, and is through February 28, 2014 Industry redemption rates include proprietary, non-proprietary, direct, institutional, VA and ETF channels and reflects Q1 2014 through February 28, 2014.

9

Invesco Industry

Percentage above the bars is change in gross sales from prior quarter

($ billions)

Net sales

Annualized Redemption rate (rolling 3-month average)

Gross and net sales

(11%)

+17% (6%)

+37% (1%) (1%)

Discussion topics



Update on EMEA

Financial results

Questions Appendix

10

11

We are well-positioned for long-term success in EMEA. Our strong and growing business is supported by:

– A record of delivering strong, long-term investment performance

– An experienced, capable and well-tenured fund management team supported by a robust investment culture

– Tremendous breadth and diversity of investment capabilities

– Strong organic growth

– Highly regarded and well-recognized brand

– Resources of a global firm

Well-positioned in EMEA A strong and growing business

Invesco Perpetual A deep and well-tenured team with strong investment performance

Past performance is not a guide to future returns Source: Invesco Perpetual as at 31 March 2014. Performance data includes all Invesco Perpetual branded UK domiciled ICVC Funds in their representative IMA Sectors. Performance is based in Sterling on a mid-to-mid basis, inclusive of net reinvested income and net of the annual management charge and all other fund expenses. Peer Group rankings are sourced and based upon IMA sectors. Performance data excludes funds within the IMA Specialist Fund sector as there are no peers, and also excludes two Invesco Perpetual fund of fund ICVC’s to avoid double counting the assets. Any reference to a rating, a ranking or an award is not a guarantee of investment performance and is not constant over time. AUM measured in three and five year quartile rankings represents 11%, and 10% of total Invesco AUM, respectively.

Percent of assets in top half of peer group – asset weighted First quarter, 2014

3 year 5 year

Top half of peer group Bottom half of peer group

97% of AUM in the top half of peers over three years

12

Cross Border fund range Well positioned for success in the $1.6T cross-border market

Past performance is not a guide to future returns Source: Morningstar as of March 31, 2014 Data includes asset-weighted performance rankings of all actively-managed Invesco Cross-Border Product Range funds domiciled in Luxembourg and Ireland. PowerShares ETFs are excluded because they are passively-managed. Peer group rankings are based on GIF sectors in Morningstar’s International/Offshore universe and calculated on a bid-to-bid basis, inclusive of gross reinvested income and net of fees. Any reference to a rating, a ranking or an award is not a guarantee of investment performance and is not constant over time. Certain funds and products were excluded from the analysis because of limited peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. AUM measured in three and five year quartile rankings represents for both periods 6% of total Invesco AUM.

3 year 5 year

Top half of peer group Bottom half of peer group

91% of AUM in the top half of peers over three years

Percent of assets in top half of peer group – asset weighted First quarter, 2014

13

Well-positioned in EMEA Our UK retail fund range is increasingly diversified

14

Source: Chronicle. Please note that UK retail fund range refers to UK-domiciled ICVC range.

Share of gross sales by investment team ($ millions)

Share of gross sales by investment team %

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Q1 13 Q1 14

Multi-Asset

US

GEMs

Europe

Asia

Japan

Global Equity

UK

Fixed Income

0

10

20

30

40

50

60

70

80

90

100

Q1 13 Q1 14

Multi-Asset

US

GEMs

Europe

Asia

Japan

Global Equity

UK

Fixed Income

EM EM

Equity

Equity

Equity

Equity

Equity

Equity

Equity

Equity

Equity

Equity

Equity

Equity

Well-positioned in EMEA Strong growth in European Cross Border

15

Source: IMA and SalesWatch, and Chronicle.

Cross Border AUM ($s millions) Cross Border market share

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Dec

2008

Dec

2009

Dec

2010

Dec

2011

Dec

2012

Dec

2013

16

778.7

125.3

4Q 2013

171.9


1Q14 LT Net Flows (billions)

4Q13 LT Net Flows (billions)

Change in Ending AUM (1Q14 vs. 4Q13)

Invesco Ltd. +$6.5 +$1.0 +1%

Invesco EMEA (ex-UK Equity Income) +$6.5 +$4.3 +7%

UK Equity Income ($3.4) ($4.8) (5%)

UK Equity Income AUM

EMEA Ex-UK Equity Income AUM

787.3

133.8 Invesco EMEA

Invesco Ltd.

1Q 2014

178.3

46.6 44.5

Ending AUM ($ billions)

17

We are well-positioned for long-term success in EMEA. Our strong and growing business is supported by:

– A record of delivering strong, long-term investment performance

– An experienced, capable and well-tenured fund management team supported by a robust investment culture

– Tremendous breadth and diversity of investment capabilities

– Strong organic growth

– Highly regarded and well-recognized brand

– Resources of a global firm


Discussion topics



Update on EMEA

Financial results

Questions Appendix

18

($ billions) 1Q-14 4Q-13 % Change

Beginning Assets $778.7 $745.5 4.5%

Long-Term Inflows 50.2 45.8 9.6%

Long-Term Outflows (43.7) (44.8) (2.5)%

Long-Term Net flows 6.5 1.0 550.0%

Net flows in Invesco PowerShares QQQ (1.3) 2.6 N/A

Net flows in Inst. Money Market Funds (6.1) 1.6 N/A

Total Net Flows (0.9) 5.2 N/A

Market Gains and Losses/Reinvestment 9.4 27.2 (65.4)%

Foreign Currency Translation 0.1 0.8 (87.5)%

Ending Assets $787.3 $778.7 1.1%

Average Long-Term AUM $659.7 $643.5 2.5%

Average Short-Term AUM* $119.9 $118.2 1.4%

Average AUM $779.6 $761.7 2.4%

Net Revenue Yield (annualized)** 45.6bps 45.0bps

Net Revenue Yield Before Performance Fees (annualized)** 43.8bps 44.4bps

* Short-term average AUM includes money market of $74.5 billion and PowerShares QQQ $45.4 billion ** Non-GAAP financial measure - See the Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation

adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial measure. 19

Total assets under management – 1Q14 vs. 4Q13

($ millions) 1Q-14 4Q-13 % Change

Adjusted Revenues

Investment Management Fees 989 983 0.6%

Service and Distribution Fees 239 230 3.7%

Performance Fees 34 11 202.7%

Other 36 33 7.2%

Third-Party Distribution, Service and Advisory Expenses (409) (400) 2.3%

Adjusted Net Revenues 888 857 3.6%

Adjusted Operating Expenses

Employee Compensation 353 332 6.3%

Marketing 24 31 (22.2)%

Property, Office and Technology 78 75 3.7%

General and Administrative 70 72 (2.8)%

Total Adjusted Operating Expenses 525 510 2.9%

Adjusted Operating Income 363 347 4.6%

Adjusted Other Income/(Expense)

Equity in Earnings of Unconsolidated Affiliates 3 5 (36.0)%

Interest and Dividend Income 4 4 5.0%

Interest Expense (19) (15) 23.0%

Other Gains and Losses, net 3 2 47.1%

Other income/(loss) of CSIP,net 8 4 134.3%

Adjusted Income from continuing operations before income taxes 362 346 4.7%

Effective Tax Rate 27.0% 25.4% N/A

Adjusted Net Income 265 258 2.4%

Adjusted net (income)/loss attributable to non-controlling interests in consolidated entities

(3) - N/A

Adjusted Net Income attributable to common shareholders 262 258 1.4%

Adjusted diluted EPS $0.60 $0.58 3.4%

Adjusted Operating Margin 40.9% 40.5%

Average AUM ($ billions) 779.6 761.7 2.4%

Headcount 6,005 5,932 1.2%

Non-GAAP financial measures - See the Appendix to this presentation for a reconciliation of net revenues, adjusted operating income (and by calculation adjusted operating margin), and adjusted net income (and by calculation adjusted diluted EPS) to the most directly comparable U.S. GAAP financial measure. 20

Non-GAAP operating results – 1Q14 vs. 4Q13

21

Maintained strong, long-term investment performance – 81% of actively managed assets ahead of peers on a 3-year basis

Net long-term inflows of $6.5 billion driven by strong investment performance and broad demand across a diverse range of capabilities

Adjusted operating income1 up 18.5% over same quarter a year ago

Adjusted operating margin1 improved to 40.9% from 38.9% in same quarter a year ago – an increase of 2 percentage points

Quarterly dividend raised to 25 cents, up 11.1% from quarterly dividend paid last year

First quarter overview Strong investment performance contributed to solid operating results

1. Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of adjusted operating income (and by calculation adjusted operating margin), to the most directly comparable U.S. GAAP financial measure. Past performance is not a guarantee of future results.

Discussion topics



Update on EMEA

Financial results

Questions

22

Appendix

Discussion topics

23



Update on EMEA

Financial results

Questions Appendix

% of assets top half of peer group

% of assets bottom half of peer group

Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $445.1 billion)

9

91

13

87

87

13

79

21 15

85

57

43

72

28

100

-

Equities

U.S. Core (5%) U.S. Growth (5%) U.S. Value (12%) Sector (1%)

U.K. (9%) Canadian (1%) Asian (5%) European (4%)




Data as of 3/31/2014. Includes AUM of $445.1 billion (57% of total IVZ) for 5 year. Peer group rankings are sourced from a widely-used third party

ranking agency in each fund’s market (Lipper, Morningstar, IMA, Russell, Mercer, eVestment Alliance, SITCA, Value Research) and asset-weighted in USD.

Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third

parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes

the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.24

Equities Other

Fixed income

% of assets top half of peer group

% of assets bottom half of peer group

Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $445.1 billion)

74

26

97

3

96

4

97

3 23

77

86

14

82

18 24

76

Global (4%)Global ex-US and

emerging markets (5%) Balanced (9%)Alternatives (7%)

Money market (16%) U.S. fixed income (5%) Global fixed income (5%) Stable value (6%)




Data as of 3/31/2014. Includes AUM of $445.1 billion (57% of total IVZ) for 5 year. Peer group rankings are sourced from a widely-used third party

ranking agency in each fund’s market (Lipper, Morningstar, IMA, Russell, Mercer, eVestment Alliance, SITCA, Value Research) and asset-weighted in USD.

Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third

parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes

the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.25

Investment performance By investment objective (actively managed assets)*

1-Yr 3-Yr 5-Yr

U.S. Core U.S. Growth U.S. Value Sector

U.K.

100%

Canadian Asian European

Equities

100% 100% 100%

100% 100%

73%

44%

26%

7% 54%

53%

1-Yr 3-Yr 5-Yr

94% 100% 100%

27%

11%

52%

59% 81%

48%

1-Yr 3-Yr 5-Yr

33% 25%

62%

25%

62%

1-Yr 3-Yr 5-Yr

29%

1% 9%

6%

15% 6%

1-Yr 3-Yr 5-Yr

66%

100% 97%

37% 68%

26%

28%

57%

1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr

AUM above benchmark 1st quartile 2nd quartile

1-Yr 3-Yr 5-Yr

16% 21% 7%

19% 16%

2%

100%

100%

33%

3%

10%

98%

10%

*Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs.

Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision.

Data as of 3/31/2014. AUM measured in the one, three, and five year quartile rankings represents 60%, 60%, and 57% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis

represents 72%, 71, and 67% of total Invesco AUM, respectively, as of 3/31/14. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, IMA, Russell, Mercer,

eVestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties.

Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and

may not reflect an investor’s experience.

0% 0% 0%

99% 100% 98%

87% 85% 87%

27%

8% 18%

54%

67% 54%

33%

42%

16%

95%

30%

38%

80%

57% 57%

77%

35%

91%

26

27%

53% 62%

71%

44%

1-Yr 3-Yr 5-Yr

79% 75%

76%

1% 22% 20%

1-Yr 3-Yr 5-Yr

9% 2% 20%

87% 94%

77%

1-Yr 3-Yr 5-Yr

61% 73%

58%

11%

20%

28%

1-Yr 3-Yr 5-Yr

5%

51% 47%

71%

33% 35%

1-Yr 3-Yr 5-Yr

44% 33%

22%

23%

1-Yr 3-Yr 5-Yr

Global Global ex-U.S. and Emerging markets Alternatives

Money market U.S. fixed income Global fixed income

Equities Other

Fixed income

Balanced

100%

Stable value

100%

100% 100% 100%

100% 100%

Investment performance By investment objective (actively managed assets)*

AUM above benchmark 1st quartile 2nd quartile

59%

15% 11%

27%

74%

63%

1-Yr 3-Yr 5-Yr

100%

24% 24%

1-Yr 3-Yr 5-Yr

100%

*Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs.

Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision.

Data as of 3/31/2014. AUM measured in the one, three, and five year quartile rankings represents 60%, 60%, and 57% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis

represents 72%, 71, and 67% of total Invesco AUM, respectively, as of 3/31/14. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, IMA, Russell, Mercer,

eVestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties.

Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and

may not reflect an investor’s experience.

85%

94%

84% 78%

99% 99%

69% 71%

47% 50%

72%

61%

65% 65% 60%

70%

87% 90%

79%

94% 97% 100% 100% 100%

27

67%

3%

15%

8%

7%

49%

7%

10%

22%

12%

28

We are diversified as a firm Delivering a diverse set of solutions to meet client needs

As of March 31, 2014

By client domicile By channel By asset class

$526.1 $27.1

$115.9 $63.4 $54.8

$787.3 Total

U.S. Canada U.K. Europe Asia

9.1% 4.2%

10.8% 43.1% 8.7%

11.2%

1-Yr Change ($ billions)

$534.6 $252.7

$787.3 Total

Retail Institutional

17.5% 0%

11.2%


$388.0 $54.6 $76.1

$177.0 $91.6

Total

Equity Balanced Money Market Fixed Income Alternative

21.6% 10.8% (2.2)%

0.6% 7.0%

11.2%


$787.3

68%

32%

29

Non-GAAP operating results – quarterly

($ millions) 1Q-14 4Q-13 % Change* 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12 2Q-12

Investment Management Fees 989 983 0.6% 938 905 863 836 813 775

Service and Distribution Fees 239 230 3.7% 221 216 206 200 196 187

Performance Fees 34 11 202.7% 9 9 39 4 3 16

Other 36 33 7.2% 33 29 26 27 24 26

Third-party distribution, service and advisory expense (409) (400) 2.3% (384) (369) (346) (336) (328) (318)

Total Operating Revenues 888 857 3.6% 816 790 788 731 708 686

Employee Compensation 353 332 6.3% 328 323 335 320 312 290

Marketing 24 31 (22.2)% 24 24 23 24 26 27

Property, Office and Technology 78 75 3.7% 73 68 66 69 66 65

General and Administrative 70 72 (2.8)% 64 64 58 60 59 60

Adjusted Operating Expenses 525 510 2.9% 488 480 482 472 464 441

Adjusted Operating Income 363 347 4.6% 328 311 306 258 244 245

Equity in Earnings of Unconsolidated Affiliates 3 5 (36.0)% 8 4 4 3 2 6

Interest and Dividend Income 4 4 5.0% 3 3 4 4 5 5

Interest Expense (19) (15) 23.0% (10) (10) (10) (13) (13) (13)

Other Gains and Losses, net 3 2 47.1% 7 (1) (1) - 10 (2)

Other income/(loss) of CSIP, net 8 4 134.3% (1) - - - - -

Adjusted Income from Continuing Operations before income taxes and minority interest

362 346 4.7% 335 307 304 252 248 240

Effective Tax Rate** 27.0% 25.4% N/A 26.6% 27.1% 26.6% 24.8% 26.3% 25.1%

Adjusted Net Income

265 258 2.4% 246 224 223 189 183 180

Adjusted net (income)/loss attributable to

noncontrolling interests in consolidated entities

(3) - N/A - - 2 - - -

Adjusted Net Income Attributable to Common Shareholders

262 258 1.4% 246 224 226 189 183 180

Adjusted Diluted EPS $0.60 $0.58 3.4% $0.55 $0.50 $0.50 $0.42 $0.40 $0.40

* % change based on unrounded figures ** Effective tax rate = Adjusted Tax Expense / (Adjusted income before taxes + (gains)/losses attributable to non-controlling interests in consolidated

entities, net) See Reconciliation of US GAAP results to non-GAAP results in this appendix

30

US GAAP operating results – quarterly

($ millions) 1Q-14 4Q-13 % Change* 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12 2Q-12

Investment Management Fees 965 955 1.1% 914 886 845 818 791 753

Service and Distribution Fees 239 230 3.7% 221 216 206 200 196 187

Performance Fees 31 9 257.5% 5 6 36 2 3 16

Other 34 31 10.3% 32 28 25 27 24 26

Total Operating Revenues 1,270 1,225 3.6% 1,172 1,136 1,112 1,047 1,014 982

Employee Compensation 362 333 8.6% 330 324 342 322 315 288

Third-Party Distribution, Service and Advisory 405 396 2.3% 381 366 346 350 326 316

Marketing 23 30 (22.0)% 23 24 22 23 26 26

Property, Office and Technology 113 86 31.4% 72 69 67 70 66 65

General and Administrative 122 86 40.7% 80 77 68 73 66 85

Transaction & Integration - - N/A - 2 1 3 3 1

Total Operating Expenses 1,025 932 10.0% 886 862 845 841 803 782

Operating Income 244 293 (16.7)% 286 274 267 206 211 200

Equity in Earnings of Unconsolidated Affiliates 10 10 (2.0)% 10 7 8 8 5 7

Interest and Dividend Income 3 3 (12.1)% 2 2 2 3 3 2

Interest Expense (19) (15) 23.0% (10) (10) (10) (13) (13) (13)

Other Gains and Losses, net 7 (19) N/A 3 - 18 (21) 18 (8)

Other income/(loss) of CSIP,net 8 4 134.3% (1) - - - - -

Interest Income of Consolidated Investment Products 48 43 13.6% 47 51 50 52 69 69

Interest Expense of Consolidated Investment Products (30) (27) 14.3% (34) (31) (33) (34) (42) (47)

Other Gains and (Losses) of Consolidated Investment Products, net

27 46 (42.9)% 38 (2) (21) (28) (25) 77

Income from continuing operations before income taxes 298 339 (12.0)% 343 292 282 173 226 287

Effective Tax Rate** 29.9% 21.9% N/A 27.1% 28.7% 28.4% 27.3% 30.2% 28.7%

Income from continuing operations, net of taxes 209 264 (21.0)% 250 208 196 117 154 226

Income/(loss) from discontinued operations, net of taxes (2) 66 N/A (1) (5) 4 11 3 2

Net Income 207 331 (37.5)% 249 204 200 128 157 228

Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities

(19) (43) (56.2)% (21) (1) 23 31 14 (74)

Net Income Attributable to Common Shareholders 188 287 (34.7)% 228 203 222 159 171 154

Diluted EPS from continuing operations $0.43 $0.50 (14.0)% $0.51 $0.46 $0.49 $0.33 $0.37 $0.33

Diluted EPS from discontinued operations - $0.15 N/A - ($0.01) $0.01 $0.02 $0.01 -

Total diluted $0.43 $0.64 (32.8)% $0.51 $0.45 $0.49 $0.35 $0.38 $0.34

* % change based on unrounded figures ** Effective tax rate = Tax Expense / (Income before income taxes+ (gains)/losses attributable to noncontrolling interests in consolidated entities, net)

31

Total assets under management – quarterly

($ billions) 1Q-14 4Q-13 % Change 3Q-13 2Q-13 1Q-13

Beginning Assets $778.7 $745.5 4.5% $705.6 $707.7 $667.4

Long-Term Inflows 50.2 45.8 9.6% 41.8 44.4 47.6

Long-Term Outflows (43.7) (44.8) (2.5)% (36.8) (43.0) (33.3)

Long-Term Net flows 6.5 1.0 550.0% 5.0 1.4 14.3

Net flows in Invesco PowerShares QQQ (1.3) 2.6 N/A 0.8 0.7 (0.4)

Net flows in Inst. Money Market Funds (6.1) 1.6 N/A 3.3 (0.7) 4.8

Total Net Flows (0.9) 5.2 N/A 9.1 1.4 18.7

Market Gains and Losses/Reinvestment 9.4 27.2 (65.4)% 22.4 (1.3) 30.6

Foreign Currency Translation 0.1 0.8 (87.5)% 8.4 (2.2) (9.0)

Ending Assets $787.3 $778.7 1.1% $745.5 $705.6 $707.7

Average Long-Term AUM $659.7 $643.5 2.5% $616.2 $609.1 $586.0

Average Short-Term AUM $119.9 $118.2 1.4% $113.2 $110.7 $105.6

Average AUM $779.6 $761.7 2.4% $729.4 $719.8 $691.6

Gross Revenue Yield (annualized)* 65.6bps 64.7bps 64.6bps 63.4bps 64.6bps

Gross Revenue Yield Less Performance Fees (annualized)*

64.0bps 64.3bps 64.3bps 63.1bps 62.5bps

Net Revenue Yield (annualized)** 45.6bps 45.0bps 44.8bps 43.9bps 45.6bps

Net Revenue Yield Less Performance Fees

(annualized)**

43.8bps 44.4bps 44.3bps 43.4bps 43.3bps

* Gross revenue yield on AUM is equal to total operating revenues divided by average AUM, excluding JV AUM. Average AUM for 1Q14, for our joint ventures in China were $5.1bn (4Q13:$4.8bn;3Q13:$4.0bn;2Q13:$3.6bn; 1Q13:$3.3bn)

**Net Revenue Yield on AUM is equal to net revenues divided by average AUM including JV AUM. Average AUM for 1Q14, for our JV in China were $5.1bn

(4Q13:$4.8bn;3Q13:$4.0bn;2Q13:$3.6bn; 1Q13:$3.3bn)

32

Total assets under management – by asset class

December 31, 2013 $778.7 $383.1 $171.7 $53.3 $82.7 $87.9

Long-Term Inflows 50.2 27.4 9.6 5.0 0.8 7.4

Long-Term Outflows (43.7) (26.2) (6.7) (4.4) (1.0) (5.4)

Long-Term Net flows 6.5 1.2 2.9 0.6 (0.2) 2.0

Net flows in Invesco PowerShares QQQ

(1.3) (1.3) - - - -

Net flows in Inst. Money Market Fund

(6.1) - - - (6.1) -

Market Gains and Losses/Reinvestment

9.4 5.0 2.3 0.8 (0.3) 1.6

Foreign Currency Translation 0.1 - 0.1 (0.1) - 0.1

March 31, 2014 $787.3 $388.0 $177.0 $54.6 $76.1 $91.6

($ billions) Total

Equity

Fixed

Income

Balanced

Money

Market

Alternative

September 30, 2013 $745.5 $353.2 $172.4 $53.5 $81.1 $85.3



Long-Term Net flows 1.0 1.5 (1.7) (1.2) (0.1) 2.5


2.6 2.6 - - - -

Net flows in Inst. Money Market Fund

1.6 - - - 1.6 -


27.2 25.1 0.9 0.8 0.1 0.3

Foreign Currency Translation 0.8 0.7 0.1 0.2 - (0.2)

33

Total assets under management – by asset class

June 30, 2013 $705.6 $321.4 $173.1 $49.7 $77.8 $83.6



Long-Term Net flows 5.0 4.6 (1.1) 0.2 (0.1) 1.4

Net flows in Invesco PowerShares QQQ 0.8 0.8 - - - -

Net flows in Inst. Money Market Fund 3.3 - - - 3.3 -

Market Gains and Losses/Reinvestment 22.4 20.7 (0.7) 2.3 0.2 (0.1)

Foreign Currency Translation 8.4 5.7 1.1 1.3 (0.1) 0.4

September 30, 2013 $745.5 $353.2 $172.4 $53.5 $81.1 $85.3

($ billions) Total

Equity

Fixed

Income

Balanced

Money

Market

Alternative

March 31, 2013 $707.7 $319.1 $175.9 $49.3 $77.8 $85.6



Long-Term Net flows 1.4 (1.4) 0.1 2.1 0.5 0.1


Net flows in Inst. Money Market Fund (0.7) - - - (0.7) -

Market Gains and Losses/Reinvestment (1.3) 4.3 (2.7) (1.5) 0.2 (1.6)

Foreign Currency Translation (2.2) (1.3) (0.2) (0.2) - (0.5)

34

Total assets under management – by channel

($ billions) Total Retail Institutional

September 30, 2013 $745.5 $492.0 $253.5

Long-Term Inflows 45.8 35.8 10.0

Long-Term Outflows (44.8) (36.1) (8.7)

Long-Term Net flows 1.0 (0.3) 1.3

Net flows in Invesco PowerShares QQQ 2.6 2.6 -

Net flows in Inst. Money Market Funds 1.6 - 1.6

Market Gains and Losses/Reinvestment 27.2 24.0 3.2

Foreign Currency Translation 0.8 1.3 (0.5)

December 31, 2013 $778.7 $519.6 $259.1



Long-Term Net flows 6.5 7.6 (1.1)

Net flows in Invesco PowerShares QQQ (1.3) (1.3) -

Net flows in Inst. Money Market Funds (6.1) - (6.1)


Foreign Currency Translation 0.1 (0.1) 0.2

March 31, 2014 $787.3 $534.6 $252.7

35

Total assets under management – by channel


March 31, 2013 $707.7 $454.9 $252.8





Net flows in Inst. Money Market Funds (0.7) - (0.7)

Market Gains and Losses/Reinvestment (1.3) (1.6) 0.3

Foreign Currency Translation (2.2) (1.2) (1.0)

June 30, 2013 $705.6 $457.7 $247.9





Net flows in Inst. Money Market Funds 3.3 - 3.3


Foreign Currency Translation 8.4 7.4 1.0

September 30, 2013 $745.5 $492.0 $253.5

36

Total assets under management – by client domicile

($ billions) Total U.S. Canada U.K. Continental

Europe Asia

September 30, 2013 $745.5 $502.5 $26.4 $113.1 $51.6 $51.9



Long-Term Net flows 1.0 (1.2) (0.2) (4.2) 3.4 3.2


Net flows in Inst. Money Market Funds 1.6 (1.6) 0.1 (0.3) 3.2 0.2

Market Gains and Losses/Reinvestment 27.2 18.9 1.7 3.8 2.5 0.3

Foreign Currency Translation 0.8 0.1 (0.9) 2.4 0.2 (1.0)

December 31, 2013 $778.7 $521.3 $27.1 $114.8 $60.9 $54.6



Long-Term Net flows 6.5 3.6 (0.1) (1.8) 4.8 -

Net flows in Invesco PowerShares QQQ (1.3) (1.3) - - - -

Net flows in Inst. Money Market Funds (6.1) (3.4) (0.1) 0.5 (3.1) -

Market Gains and Losses/Reinvestment 9.4 5.9 1.2 1.6 0.8 (0.1)

Foreign Currency Translation 0.1 - (1.0) 0.8 - 0.3

March 31, 2014 $787.3 $526.1 $27.1 $115.9 $63.4 $54.8

37

Total assets under management – by client domicile


Europe Asia

March 31, 2013 $707.7 $482.4 $26.0 $104.6 $44.3 $50.4



Long-Term Net flows 1.4 (0.3) (0.4) (0.6) 2.5 0.2


Net flows in Inst. Money Market Funds (0.7) (0.4) - 0.1 (0.1) (0.3)

Market Gains and Losses/Reinvestment (1.3) (0.9) 0.1 0.3 (0.4) (0.4)

Foreign Currency Translation (2.2) - (0.9) (0.1) 0.1 (1.3)

June 30, 2013 $705.6 $481.5 $24.8 $104.3 $46.4 $48.6



Long-Term Net flows 5.0 2.0 (0.2) (0.3) 2.2 1.3


Net flows in Inst. Money Market Funds 3.3 3.4 0.1 (0.2) - -

Market Gains and Losses/Reinvestment 22.4 14.7 1.1 2.7 2.5 1.4

Foreign Currency Translation 8.4 0.1 0.6 6.6 0.5 0.6

September 30, 2013 $745.5 $502.5 $26.4 $113.1 $51.6 $51.9

38

Passive assets under management – by asset class

December 31, 2013 $139.7 $85.6 $39.5 - - $14.6

Long-Term Inflows 8.6 5.4 2.2 - - 1.0

Long-Term Outflows (5.3) (3.2) (1.2) - - (0.9)

Long-Term Net flows 3.3 2.2 1.0 - - 0.1


(1.3) (1.3) - -

Net flows in Inst. Money Market Funds

- - - - - -


1.2 0.5 0.4 - - 0.3

Foreign Currency Translation - - - - - -

March 31, 2014 $142.9 $87.0 $40.9 - - $15.0

($ billions) Total

Equity

Fixed

Income

Balanced

Money

Market

Alternative

September 30, 2013 $129.6 $74.1 $39.6 - - $15.9



Long-Term Net flows 0.7 1.8 0.1 - - (1.2)


2.6 2.6 - -


- - - - - -


7.0 7.1 (0.2) - - 0.1

Foreign Currency Translation (0.2) - - - - (0.2)

June 30, 2013 $123.7 $65.7 $42.5 - - $15.5



Long-Term Net flows 0.2 2.4 (2.3) - - 0.1


0.8 0.8 - -


- - - - - -


4.9 5.2 (0.6) - - 0.3


September 30, 2013 $129.6 $74.1 $39.6 - - $15.9

($ billions) Total

Equity

Fixed

Income

Balanced

Money

Market

Alternative

March 31, 2013 $123.1 $62.0 $41.9 - - $19.2



Long-Term Net flows 1.3 2.0 1.8 - - (2.5)


0.7 0.7 - -


- - - - - -


(1.0) 1.0 (1.2) - - (0.8)


39

Passive assets under management – by asset class

40

Passive assets under management – by channel


September 30, 2013 $129.6 $108.3 $21.3



Long-Term Net flows 0.7 0.5 0.2


Net flows in Inst. Money Market Funds - - -


Foreign Currency Translation (0.2) - (0.2)

December 31, 2013 $139.7 $118.2 $21.5




Net flows in Invesco PowerShares QQQ (1.3) (1.3) -


Market Gains and Losses/Reinvestment 1.2 1.2 -

Foreign Currency Translation - - -

March 31, 2014 $142.9 $121.5 $21.4

41

Passive assets under management – by channel


March 31, 2013 $123.1 $98.5 $24.6






Market Gains and Losses/Reinvestment (1.0) (1.1) 0.1

Foreign Currency Translation (0.4) - (0.4)

June 30, 2013 $123.7 $100.0 $23.7

Long-Term Inflows 8.7 8.7 -






Foreign Currency Translation - - -

September 30, 2013 $129.6 $108.3 $21.3

42

Passive assets under management – by client domicile


Europe Asia

September 30, 2013 $129.6 $125.4 $0.1 - $1.4 $2.7

Long-Term Inflows 8.6 8.4 - - 0.2 -

Long-Term Outflows (7.9) (7.9) - - - -

Long-Term Net flows 0.7 0.5 - - 0.2 -

Net flows in Invesco PowerShares QQQ 2.6 2.6 - -

Net flows in Inst. Money Market Funds - - - - - -

Market Gains and Losses/Reinvestment 7.0 6.7 - - 0.2 0.1


December 31, 2013 $139.7 $135.2 $0.1 - $1.8 $2.6


Long-Term Outflows (5.3) (5.1) - - (0.1) (0.1)

Long-Term Net flows 3.3 3.4 - - - (0.1)

Net flows in Invesco PowerShares QQQ (1.3) (1.3) - -


Market Gains and Losses/Reinvestment 1.2 1.2 - - - -


March 31, 2014 $142.9 $138.5 $0.1 - $1.8 $2.5


Europe Asia

March 31, 2013 $123.1 $116.9 $0.1 - $1.2 $4.9

Long-Term Inflows 11.8 11.5 - - 0.2 0.1

Long-Term Outflows (10.5) (8.3) - - (0.1) (2.1)

Long-Term Net flows 1.3 3.2 - - 0.1 (2.0)



Market Gains and Losses/Reinvestment (1.0) (1.1) - - - 0.1


June 30, 2013 $123.7 $119.7 $0.1 - $1.3 $2.6


Long-Term Outflows (8.5) (8.4) - - (0.1) -

Long-Term Net flows 0.2 0.2 - - - -



Market Gains and Losses/Reinvestment 4.9 4.7 - - 0.1 0.1


September 30, 2013 $129.6 $125.4 $0.1 - $1.4 $2.7

43

Passive assets under management – by client domicile

($ millions)

Operating Revenues

US GAAP

Basis

Proportional Consolidation of Joint Ventures

3rd party distribution, service and advisory

expenses

Acquisition related

Market appreciation / depreciation of

deferred compensation awards

Consolidated Investment

Products

Other* Non-GAAP basis

Investment Management Fees 965 18 - - - 6 - 989

Service and Distribution Fees 239 - - - - - - 239

Performance Fees 31 - - - - 3 - 34

Other 34 1 - - - - - 36

Third-Party Distribution, Service and Advisory - (4) (405) - - - - (409)

Total Operating Revenues reconciled to net revenues

Operating Expenses

1270 15 (405) - - 8 - 888

Employee Compensation 362 3 - - (4) - (7) 353

Third-Party Distribution, Service and Advisory 405 - (405) - - - - -

Marketing 23 1 - - - - - 24

Property, Office and Technology 113 1 - - - - (36) 78

General and Administrative 122 2 - (4) - (13) (37) 70

Transaction & Integration - - - - - - - -

Total Operating Expenses 1025 6 (405) (4) (4) (13) (80) 525

Operating Income reconciled to adjusted operating income 244 10 - 4 4 21 80 363

Equity in Earnings of Unconsolidated Affiliates 10 (8) - - - 1 - 3

Interest and Dividend Income 3 1 - - (1) 1 - 4

Interest Expense (19) - - - - - - (19)

Other Gains and Losses, net 7 - - - (4) - - 3

Other income/(loss) of CSIP, net 8 - - - - - - 8

Interest Income of Consolidated Investment Products 48 - - - - (48) - -

Interest Expense of Consolidated Investment Products (30) - - - - 30 - -

Other Gains and (Losses) of Consolidated Investment Products, net 27 - - - - (27) - -

Income from continuing operations before income taxes 298 3 - 4 - (21) 80 362

Income Tax Provision (89) (3) - 5 - - (11) (98)

Income from continuing operations, net of income taxes 209 - - 9 - (21) 69 265

Income/(loss) from discontinued operations, net of taxes (2) - - 2 - - - -

Net income 207 - - 11 - (21) 69 265


(19) - - - - 16 - (3)

Net Income Attributable to Common Shareholders reconciled to adjusted net income attributable to common shareholders

188 - - 11 - (5) 69 262

Diluted EPS from continuing operations

Diluted EPS from discontinued operations

Diluted EPS

Diluted Shares Outstanding

Operating margin

$0.43

-

$0.43

437.4

19.2%

Adjusted diluted EPS


Adjusted Operating Margin

$0.60

437.4

40.9%

* Other: Please refer to pages 18-22 in the 1Q 2014 earnings press release for a description of the adjustments

Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014

44

($ millions)

Operating Revenues

US GAAP

Basis



expenses

Acquisition related




Products


Investment Management Fees 955 18 - - - 6 4 983



Other 31 2 - - - - - 33



Operating Expenses

1225 16 (396) - - 8 4 857



Marketing 30 1 - - - - - 31


General and Administrative 86 2 - (6) - (10) - 72




Equity in Earnings of Unconsolidated Affiliates 10 (4) - - - (1) - 5



Other Gains and Losses, net (19) - - - (11) - 32 2

Other income/(loss) of CSIP, net 4 - - - - - - 4




Income from continuing operations before income taxes 339 1 - 6 (4) (44) 49 346

Income Tax Provision (74) (1) - 4 1 - (18) (88)

Income from continuing operations, net of income taxes 264 - - 10 (3) (44) 31 258

Income/(loss) from discontinued operations, net of taxes 66 - - (66) - - - -

Net income 331 - - (57) (3) (44) 31 258


(43) - - - - 43 - -


287 - - (57) (3) (1) 31 258



Diluted EPS


Operating margin

$0.50

$0.15

$0.64

445.9

23.9%




$0.58

445.9

40.5%


Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2013

45

($ millions)

Operating Revenues

US GAAP

Basis



expenses

Acquisition related




Products





Other 32 2 - - - - - 33



Operating Expenses

1,172 14 (381) - - 12 - 816

Employee Compensation 330 4 - - (7) - - 328


Marketing 23 1 - - - - - 24

Property, Office and Technology 72 1 - - - - - 73








Other Gains and Losses, net 4 - - - (9) 12 1 7

Other income/(loss) of CSIP, net (1) - - - - - - (1)




Income from continuing operations before income taxes 343 2 - 4 (4) (11) 1 335

Income Tax Provision (93) (2) - 5 1 - - (89)

Income from continuing operations, net of income taxes 250 - - 9 (3) (11) 1 246


Net income 249 - - 10 (3) (11) 1 246


(21) - - - - 21 - -


228 - - 10 (3) 9 1 246



Diluted EPS


Operating margin

$0.51

-

$0.51

448.8

24.4%




$0.55

448.8

40.2%


Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013

46

($ millions)

Operating Revenues

US GAAP

Basis



expenses

Acquisition related




Products





Other 28 1 - - - - - 29



Operating Expenses

1136 12 (366) - - 9 - 790



Marketing 24 1 - - - - - 24



Transaction & Integration 2 - - (2) - - - -






Other Gains and Losses, net - - - - (1) - (1) (1)



Other Gains and (Losses) of Consolidated Investment Products, net (2) - - - - 2 - -

Income from continuing operations before income taxes 292 3 - 6 1 2 3 307

Income Tax Provision (84) (3) - 4 - - (1) (83)

Income from continuing operations, net of income taxes 208 - - 10 1 2 2 224


Net income 204 - - 14 1 2 2 224


(1) - - - - 1 - -


203 - - 14 1 4 2 224



Diluted EPS


Operating margin

$0.46

($0.01)

$0.45

450.1

24.1%




$0.50

450.1

39.3%


Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2013

47

($ millions)

Operating Revenues

US GAAP

Basis

Proportional Consolidation

of Joint Ventures

3rd party distribution, service and

advisory expenses

Acquisition related




Products





Other 25 1 - - - - - 26

Third-Party Distribution, Service and Advisory - (2) (346) - - - 3 (346)


Operating Expenses

1112 10 (346) - - 9 3 788

Employee Compensation 342 4 - (2) (8) - - 335


Marketing 22 1 - - - - - 23






Equity in Earnings of Unconsolidated Affiliates 8 (5) - - - - - 4



Other Gains and Losses, net 18 - - - (18) - - (1)




Income from continuing operations before income taxes 282 - - 8 (11) 17 9 304

Income Tax Provision (86) - - 5 3 - (2) (81)

Income from continuing operations, net of income taxes 196 - - 12 (9) 17 7 223


Net Income 200 - - 8 (9) 17 7 223


23 - - - - (20) - 2


222 - - 8 (9) (3) 7 226



Diluted EPS


Operating margin

$0.49

$0.01

$0.49

449.0

24.0%




$0.50

449.0

38.9%


Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2013

48

($ millions)

Operating Revenues

US GAAP

Basis



expenses

Acquisition related




Products





Other 27 1 - - - - - 27

Third-Party Distribution, Service and Advisory - (1) (350) - - - 15 (336)


Operating Expenses

1047 10 (350) - - 9 15 731



Marketing 23 1 - - - - - 24






Equity in Earnings of Unconsolidated Affiliates 8 (5) - - - - - 3



Other Gains and Losses, net (21) - - - (2) - 23 -




Income from continuing operations before income taxes 173 - - 7 - 28 45 252

Income Tax Provision (56) - - 4 - - (11) (63)

Income from Continuing Operations, net of tax 117 - - 10 - 28 34 189

Income/(loss) from discontinued operations, net of taxes 11 - - (11) - - -

Net Income 128 - - (1) - 28 34 189


31 - - - - (31) - -


159 - - (1) - (2) 34 189



Diluted EPS


Operating margin

$0.35

$0.02

$0.35

451.2

19.6%




$0.42

451.2

35.3%


Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2012

49

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related


deferred compensation

awards


Products




Performance Fees 3 - - - - - - 3

Other 24 - - - - - - 24



Operating Expenses

1014 9 (326) - - 12 - 708



Marketing 26 1 - - - - (1) 26









Other Gains and Losses, net 18 - - (8) (10) 9 - 10




Income from continuing operations before income taxes 226 - - (1) (6) 25 4 248

Income Tax Provision (72) - - 6 2 - (1) (65)

Income from Continuing Operations, net of tax 154 - - 5 (5) 25 4 183


Net Income 157 - - 2 (5) 25 4 183


14 - - - - (14) - -


171 - - 2 (5) 11 4 183



Diluted EPS


Operating margin

$0.37

$0.01

$0.38

452.8

20.8%




$0.40

452.8

34.5%


Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2012

50

($ millions)

Operating Revenues

US GAAP

Basis


of Joint Ventures


advisory expenses

Acquisition related


deferred compensation

awards


Products




Performance Fees 16 - - - - - - 16

Other 26 - - - - - - 26



Operating Expenses

982 9 (316) - - 11 - 686

Employee Compensation 288 3 - - - - (1) 290


Marketing 26 1 - - - - (1) 27




Total Operating Expenses 782 6 (316) (11) - (15) (6) 441

Operating Income reconciled to adjusted operating income 200 4 - 11 - 25 6 245




Other Gains and Losses, net (8) - - - 5 - 1 (2)




Income from continuing operations before income taxes 287 - - 11 4 (68) 7 240

Income Tax Provision (61) - - 4 (1) - (2) (60)

Income from continuing operations, net of income taxes 226 - - 15 2 (68) 5 180


Net Income 228 - - 13 2 (68) 5 180


(74) - - - - 74 - -


154 - - 13 2 6 5 180



Diluted EPS


Operating margin

$0.33

-

$0.34

455.3

20.4%




$0.40

455.3

35.7%


Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012

51

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